Betting giants Ladbrokes and Coral may be forced to sell up to 400 shops if a proposed mega-merger is to get out of the starting gate.
The Competition and Markets Authority said a proposed £2.3 billion tie-up could lower competition on the high street.
Ladbrokes – the UK’s second largest bookmaker – operates a network of 2,154 betting shops in Britain and has a further 77 in North Ireland.
Coral – Britain’s third largest bookmaking chain – has 1,850 outlets across the UK.
Issuing its interim findings into the proposed merger, the regulator said it had identified 659 local areas across the country where a coming together of the two companies could lead to a substantial loss of competition and a worsening of the offer to consumers.
The watchdog primarily looked at locations where shops operated by the firms sat within 400 metres of each other, although wider criteria were also applied.
A number of Ladbrokes and Coral’s locations within Tayside and Fife could be impacted if the CMA forces a sale.
Martin Cave, who is leading the inquiry for the CMA, said: “We’ve provisionally found that the merger between two of the largest bookmakers in the country may be expected to reduce competition and choice for customers in a large number of local areas.
“Although online betting has grown substantially in recent years, the evidence we’ve seen confirms that a large number of customers still choose to bet in shops – and many would continue to do so after the merger.
“For these customers, competition comes from the choice of shops in their local area and it’s they who could lose out from any reduction of competition and choice.
“Discounts and offers of free bets to individual customers are ways betting shops respond to local competition which could be threatened by the merger.
“We’re also concerned that such a widespread potential reduction in competition at the local level could worsen those elements that are set nationally such as odds and betting limits.”
Following publication of its interim findings, the CMA has now moved into a public consultation phase which closes on June 13.
The watchdog’s final report on the proposed merger is expected later in the summer.
